The buzz word of the moment in the travel industry is the 'staycation' - holidaying at home rather than abroad. Travelodge chief executive Grant Hearn said: 'There is no doubt that the staycation most of us have been predicting has, and is, materialising. We have sold more rooms this summer than ever before with coastal and tourist sites selling the fastest.'

Rival Whitbread has seen sales at its Somerset Premier Inn up 13% on the year, with Devon and Cheltenham adding 5%.

While its shares closed down 27p to 920½p, Whitbread is up 16% since February. It has also benefited from cheap promotions at its Beefeater and Taybarns chains

When it comes to the traditional British holiday camp, both Butlins and Pontins are riding high. Bookings at Pontins are up 25% and private equity-backed Merlin Entertainment, owner of Madame Tussauds, the London Eye and Alton Towers, has seen boost from the downturn.

'Families are cutting back on their spending but still need to entertain their kids,' said a spokesman.
'So parents want a guaranteed good time when they do spend their cash which is why they are coming to our attractions.'

Train and coach firms are cashing in from families whizzing around the country. Holiday-makers took an additional 1.3m trips in the UK in the first four months of this year, according to Visit Britain.

First Group, which operates the TransPennine Express, said it saw a record number of passengers travelling into Windermere last month and an 11% increase to the seaside town of Scarborough. Its shares closed down 19½p to 354½p yesterday, but there are still up 21% since February.

Both service the self-catering set as well as families holidaying in their homes. But it is travel firms Thomas Cook (down 10.10p to 209.84p) and Thomson owner Tui (down 4.30p to 236p) that are in danger.

They offer few breaks in the UK and may suffer from a holiday hangover with none of the fun.